Despite the growing involvement of the USDT stablecoin in criminal activities, the UN has reported that law enforcement authorities have successfully dismantled several money laundering organizations responsible for transferring illegal funds using USDT.
The United Nations (UN) has warned that Tether's USDT stablecoin has become the preferred cryptocurrency for money laundering schemes and other illicit activities in Asia.
financial time reported Monday, citing a report released by the UN Drugs and Crime Unit, which claims that nefarious actors in Southeast Asia are using digital assets to engage in fraudulent activities, including the infamous romance scam known as pig slaughter.
Increase in criminal activities involving Tether
The United Nations Office of Drugs and Crime Unit found that in recent years, the Asian region has been significantly entangled in highly sophisticated and high-speed money laundering and other criminal activities involving Tether's USDT.
The UN report cited an example of a money laundering syndicate operating in both Myanmar and Cambodia, displaying a street sign advertising USDT and offering to exchange “black” tokens for cash.
These crimes also extend to online gambling platforms that operate illegally in the region. According to the Financial Times report, these platforms have become the preferred choice for cryptocurrency-related money launderers, especially those using USDT, which represents the world's largest stablecoin.
UN executive Jeremy Douglas said the rise of cryptocurrencies and new technologies has successfully created an alternative banking system for bad actors.
“Organized crime has effectively created a shadow banking system using new technologies, and the proliferation of poorly or completely unregulated online casinos along with cryptocurrencies has boosted the region's criminal ecosystem,” Douglas said.
Tether froze $225 million in USDT
Despite the growing involvement of the USDT stablecoin in criminal activities, the UN has reported that law enforcement authorities have successfully dismantled several money laundering organizations responsible for transferring illegal funds using USDT.
In a notable incident last year, Singapore authorities dismantled an illegal organization in August, recovering $737 million in cash and cryptocurrency.
During the same period, Tether, in collaboration with US authorities and crypto exchange OKX, froze USDT tokens worth $225 million. Coinspeaker reported that the funds were traced to a syndicate involved in illegal activities related to “pig butchery” and human trafficking in Southeast Asia.
On November 16, stablecoin issuer Tether addressed letters to the US Senate Committee on Banking, Housing and Urban Affairs and the US House Committee on Financial Services, expressing their dedication to combating illicit activities within the digital asset space.
In these letters, Tether revealed its proactive measures, including the implementation of a reactor tool obtained from Chainalysis, a blockchain data analysis company. This tool provides reports on all transactions made on Tether secondary markets.
Additionally, Tether said it established a dedicated Compliance Department equipped with an anti-money laundering (AML) and know-your-customer (KYC) program. The tool aims to help the company analyze blockchain transactions, identify wallets associated with problematic activities, and prevent the financing of terrorist groups.
To date, the stablecoin issuer has frozen more than 1,260 addresses linked to illicit activities, with a combined value exceeding $875 million, according to data of Dune Analysis.
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